- For estate, gift, and generation-skipping transfer tax purposes, for individuals dying and gifts made after 2012, there is a $5 million exemption (adjusted for inflation). The top estate, gift and GST rate was increased from 35% to 40%;
- The 2010 Tax Relief Act introduced the “portability” rules into the federal estate transfer tax system. Under the portability rules, the estate of a decedent who is survived by a spouse can elect to apply any unused exclusion amount to the surviving spouse’s own transfers during life and at death. The portability provision was made permanent by this legislation;
- Tax-free distribution from IRA’s used for charitable purposes is reinstated for 2012 and continued through 2013. Special rules for contributions occurring in 2012 and early in 2013 will be forthcoming. The gift must occur by 1/31/2013 and you must be 70 ½ or older;
- Though not a part of the legislation, the annual gift tax exclusion increased to $14,000 per person, per year.
Feel free to call, e-mail, or schedule an appointment to discuss how these might affect you and how you can optimize opportunities in your specific situation.